UPDATE 2-Royal Bancshares needs Fed approval to pay dividend
(Adds Royal Bancshares comment on capitalization, earnings)
WASHINGTON, March 25 (Reuters) - The Federal Reserve said on Thursday Royal Bancshares of Pennsylvania Inc (RBPAA.O), the parent of Royal Bank America and Royal Asian Bank, would need its written consent to declare or pay any dividends.
The Fed said the actions were part of a written agreement between Royal Bancshares of Pennsylvania Inc and the Federal Reserve of Philadelphia.
The Fed said the bank could not declare or pay any dividends or make any other payments that would reduce the bank's capital without the Fed's consent.
Marc Sanders, director of marketing for the Pennsylvania-based bank, said Royal has not paid a dividend since April 2008.
The bank will also have 60 days to submit a plan to maintain its capital base, taking into account allowances for loan and lease losses, concentration of credit, and projected retained earnings, the Fed said.
"We continue to meet all regulatory capital ratio levels required for an institution to be considered "well capitalized," Sanders said.
Royal Bancshares last week reported a net loss of $10.1 million, or 79 cents a common share, compared to a year earlier net loss of $27.3 million, or $2.05 per share. It had total assets of $1.29 billion as of Dec. 31
The banking firm's full-year 2009 loss was $33.3 million, versus a net loss of $38.1 million. It said the 2009 results were hurt by $11 million of impairment losses on investment securities, $20.6 million of provisions for loan and lease losses, $7.8 million of expenses related to other real estate owned and loan collections, and FDIC assessments of $3.8 million.